Company Description:
STEC, Inc. (STEC) is a global provider of enterprise-class Flash solid-state drives (SSDs) for enterprise-storage systems and servers that companies use to retain and access their critical data. The Companyâ€™s products are designed specifically for storage systems and servers that run applications requiring a high level of input/output operations per second (IOPS) performance, capacity, reliability and low latency. STEC designs and develops its SSD controllers, enhance them with its own firmware and combine them with third-party Flash memory. The Company sells its SSDs to global storage and server original equipment manufacturers (OEMs), which integrate them into storage systems and servers used by enterprises in a variety of industries, including financial services, government, transportation, defense and aerospace and transaction processing. The Company also offers both monolithic DRAM modules and DRAM modules based on its own stacking technology.

Why We Like it:
The storage sector has been beaten down and is due for a comeback if the broader market cooperates. STEC bounced hard off of its 20-day SMA on Thursday and is forming an ascending triangle on its daily chart. I suggest readers initiate long positions if STEC pulls back to $13.10 or breaks higher to $13.50, whichever occurs first. We are targeting a move up to the stock's congestion areas from April and June. If triggered at $13.10, our profit target on option positions is +50% to +75%.

Suggested Position: Buy November $14.00 CALL, current ask $1.05

Annotated chart:

Entry on September XX
Earnings 11/03/2010 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on September 25, 2010